Homework Help is Here – Start Your Trial Now!
Business
Accounting
Volata Company began operations on January 1, 2019. In the second quarter of 2020, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company's interim income statements as originally reported under the LIFO method follow: Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income Cost of goods sold (FIFO) 1stQ $ 26,000 5,600 3,600 $ 16,800 4, 200 $ 12,600 Net income Net income per common share 2ndQ $ 28,000 6,600 3,800 $ 17,600 4,400 $ 13,200 2ndQ 1stQ $5,400 $ 6,200 2019 Three Months Ended June 30 2019 2020 3rdQ $ 30,000 7,400 4,200 $ 18,400 4,600 $ 13,800 If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows: 2019 4thQ $ 32,000 8,600 4,600 $ 18,800 4,700 $ 14,100 2020 1stQ $ 34,000 10,100 4,800 $ 19, 100 4,775 $ 14,325 2020 1stQ 3rdQ 4thQ $ 6,800 $ 7,600 $ 9,000 Sales for the second quarter of 2020 are $36,000, cost of goods sold under the FIFO method is $10,600, and operating expenses are $5,000. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. Six Months Ended June 30 2019 2020 Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2020. (Round "Earnings per share" answers to 2 decimal places.)

Volata Company began operations on January 1, 2019. In the second quarter of 2020, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company's interim income statements as originally reported under the LIFO method follow: Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income Cost of goods sold (FIFO) 1stQ $ 26,000 5,600 3,600 $ 16,800 4, 200 $ 12,600 Net income Net income per common share 2ndQ $ 28,000 6,600 3,800 $ 17,600 4,400 $ 13,200 2ndQ 1stQ $5,400 $ 6,200 2019 Three Months Ended June 30 2019 2020 3rdQ $ 30,000 7,400 4,200 $ 18,400 4,600 $ 13,800 If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows: 2019 4thQ $ 32,000 8,600 4,600 $ 18,800 4,700 $ 14,100 2020 1stQ $ 34,000 10,100 4,800 $ 19, 100 4,775 $ 14,325 2020 1stQ 3rdQ 4thQ $ 6,800 $ 7,600 $ 9,000 Sales for the second quarter of 2020 are $36,000, cost of goods sold under the FIFO method is $10,600, and operating expenses are $5,000. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. Six Months Ended June 30 2019 2020 Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2020. (Round "Earnings per share" answers to 2 decimal places.)

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 2RE: Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of...
See similar textbooks
icon
Related questions
Question

G

Volata Company began operations on January 1, 2019. In the second quarter of 2020, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company's interim income statements as originally reported under the LIFO method follow: Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income Cost of goods sold (FIFO) 1stQ $ 26,000 5,600 3,600 $ 16,800 4, 200 $ 12,600 Net income Net income per common share 2ndQ $ 28,000 6,600 3,800 $ 17,600 4,400 $ 13,200 2ndQ 1stQ $ 5,400 $ 6,200 2019 Three Months Ended June 30 2019 If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows: 2020 3rdQ $ 30,000 2019 7,400 4, 200 $ 18,400 4,600 $ 13,800 4thQ $ 32,000 8,600 4,600 $ 18,800 4,700 $ 14,100 3rdQ 4thQ $ 6,800 $ 7,600 Sales for the second quarter of 2020 are $36,000, cost of goods sold under the FIFO method is $10,600, and operating expenses are $5,000. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. 2020 1stQ $ 34,000 Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2020. (Round "Earnings per share" answers to 2 decimal places.) 10, 100 4,800 $ 19,100 4,775 $ 14,325 Six Months Ended June 30 2019 2020 2020 1stQ $9,000
Transcribed Image Text:Volata Company began operations on January 1, 2019. In the second quarter of 2020, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company's interim income statements as originally reported under the LIFO method follow: Sales Cost of goods sold (LIFO) Operating expenses Income before income taxes Income taxes (25%) Net income Cost of goods sold (FIFO) 1stQ $ 26,000 5,600 3,600 $ 16,800 4, 200 $ 12,600 Net income Net income per common share 2ndQ $ 28,000 6,600 3,800 $ 17,600 4,400 $ 13,200 2ndQ 1stQ $ 5,400 $ 6,200 2019 Three Months Ended June 30 2019 If the FIFO method had been used since the company began operations, cost of goods sold in each of the previous quarters would have been as follows: 2020 3rdQ $ 30,000 2019 7,400 4, 200 $ 18,400 4,600 $ 13,800 4thQ $ 32,000 8,600 4,600 $ 18,800 4,700 $ 14,100 3rdQ 4thQ $ 6,800 $ 7,600 Sales for the second quarter of 2020 are $36,000, cost of goods sold under the FIFO method is $10,600, and operating expenses are $5,000. The effective tax rate remains 25 percent. Volata Company has 1,000 shares of common stock outstanding. 2020 1stQ $ 34,000 Prepare a schedule showing the calculation of net income and earnings per share that Volata reports for the three-month period and the six-month period ended June 30, 2020. (Round "Earnings per share" answers to 2 decimal places.) 10, 100 4,800 $ 19,100 4,775 $ 14,325 Six Months Ended June 30 2019 2020 2020 1stQ $9,000
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Financial Reporting in Hyperinflationary Economies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
SEE MORE TEXTBOOKS